When a company does business in another country whose official language is the same
as the company’s home country, employees can assume that although some spellings are
different, words will mean the same thing.
A growing number of MNEs in Asia and Latin America are using performance-based
pay to link compensation with business results.
The term collectivism refers to a system that stresses the primacy of societal goals over
individual goals.
A comprehensive supply chain strategy should include good inventory management.
GATT’s contribution to trade liberalization made possible the expansion of world trade
in the second half of the twentieth century.
Companies have tended to wait too long to divest poorly performing foreign facilities,
trying instead to improve performance through expensive means.
Laws on local business activities directly influence the operations of domestic and
foreign companies in areas such as hiring and firing workers.
The identity of a nation is typically promoted through symbols, monuments, and
museums.
The Chicago Mercantile Exchange and NASDAQ are part of the OTC market.
Andrews Enterprises, which uses an international division structure, should be able to
respond quickly to foreign activities but will most likely experience costly
country-to-country duplication.
Germanic and Japanese companies tend to be more optimistic than U.S. and U.K.
companies.
A comprehensive global sourcing strategy should include inventory management.
The U.S. government has more than 10,000 tariff classifications and more than half of
them are subject to interpretation.
According to the purchasing power parity theory, a change in relative interest rates
between two countries must cause a change in exchange rates.
Six Sigma is a highly focused system of quality control that scrutinizes a company’s
entire production system.
An international joint venture is an agreement between two or more companies for the
use of a trademark.
In the spot market, the spread is the difference between the bid and offer rates and is the
trader’s profit margin.
The Happy Planet Index measures well-being and perceptions of living conditions by
assessing areas such as housing, incomes, security, and work-life balance.
As companies expand internationally, they must change their organizational structure
and operating strategies to take advantage of regional trading groups.
In most cases, trade protectionism makes it easier for a company to buy what it needs
and to sell products in global markets.
The international mobility of labor includes workers, students, tourists, and retirees who
travel to another country.
Pender Pet Products is considered an opportunistic importer because the firm seeks
products around the world that it can import and sell profitably to domestic consumers.
Acquiring and allocating financial resources among the company’s activities and
projects is the responsibility of the financial marketing manager.
The production of goods by a French company in Italy for sale in Italy is an example of
an Italian merchandise import.
According to the text, technological advances such as e-mail and VoIP have increased
the appeal of international trade because it is now easy and inexpensive to manage
customer needs and communicate with customers frequently.
U.S. and U.K. companies tend to be more transparent than Japanese companies.
The most-favored-nation policy is a WTO privilege that allows member nations to
restrict tariff cuts to members.
Pressures for local responsiveness include cross-national differences in terms of
consumer preferences, advances in technology, and government regulations.
In developed countries, the percentage of the working-age population (using today’s
standards) is expected to rise by 2050.
When a large company and a small company enter a joint venture, the large company is
expected to contribute more to the arrangement.
Technical forecasting relies on trends in economic variables to predict future exchange
rates.
The three major responsibilities of the European Parliament are legislative power,
control over the budget, and supervision of executive decisions.
When comparing economic and demographic variables among countries, one should
consider that consumers in developing countries do not necessarily follow the same
historical patterns as those in more developed countries.
The framework that managers use to make decisions that maximize their companies’
value creation performance is referred to as a strategy.
The shifting of trade to countries in a regional group at the expense of trade with
countries not in the group is known as trade internalization.
A go/no-go decision for foreign expansion means that management reviews existing
information and decides whether more information is needed.
U.S. MNEs that operate in Europe are under pressure to conform to the emissions
standards of the Kyoto Protocol.
In advertisements aimed at different countries, companies sometimes use actors who do
not speak, along with a voice and/or print overlay. What is the main reason for doing
this?
A) avoiding dubbing that does not correspond to lip movements
B) altering themes and messages among countries
C) meeting legal requirements on morality
D) reaching a hearing- or sight-impaired audience
What term refers to a currency on deposit outside its country of issue?
A) Eurocurrency
B) Eurodollar
C) Euroyen
D) Europound
Patrons of McDonald’s can enter the restaurant located in any part of the world and
expect to see employees wearing the same uniforms and menus offering the same
products. McDonald’s most likely uses which system of coordination?
A) standardization
B) consensus
C) plan
D) adaptation
A greenfield investment is another name for a company’s decision to ________.
A) acquire an interest in an existing foreign operation
B) implement sustainable marketing practices
C) construct a new facility in a foreign market
D) build a facility for a local company
Which of the following has been the LEAST likely outcome of e-commerce on
exporting?
A) enhancing supply chains
B) triggering a rise in born globals
C) overcoming capital limitations for SMEs
D) expanding market opportunities for traders
Eight of the top 10 exporting and importing countries are countries with ________.
A) cheap labor forces
B) small land masses
C) natural advantages
D) developed economies
When selecting a commercial and/or investment bank to deal in foreign exchange,
corporations are most likely to use ________.
A) the exchange-based market rather than the over-the-counter market
B) more than one bank to meet different needs
C) banks located in the home country
D) investment banks only
Risks to companies from natural disasters and communicable diseases are ________.
A) evenly distributed around the world
B) more complicated today because of publicity
C) a minor issue to global firms because of insurance
D) most prevalent in the poorest countries of the world
The essence of a differentiation strategy is to ________.
A) target the most sophisticated segment of the market
B) incorporate the greatest number of features into a product
C) offer a unique product that supports a premium price
D) outspend rivals on product advertising
All of the following are reasons a country might institute import restrictions to improve
its balance of trade position with other countries EXCEPT to ________.
A) maintain essential industries
B) reduce imports and encourage exports
C) get comparable access for its companies
D) bargain away restrictions by other countries
Which of the following is typically true of an export management company?
A) It is usually a division of a manufacturing company.
B) Most EMCs in the United States are large, representing a wide range of products and
large number of companies.
C) It operates on a contractual basis for a manufacturer by helping obtain orders for its
clients’ products.
D) It usually takes title to products rather than acting as an agent.
Which of the following is one of the four phases of purchasing globalization?
A) foreign buying as a part of procurement strategy
B) complete rejection of domestic purchasing
C) foreign buying based on want
D) global purchasing only
Procter & Gamble exchanges cleaning products for machinery with Russia and
Hungary. The nature of this transaction indicates that Procter & Gamble is engaging in
________.
A) third-party logistics
B) freight forwarding
C) countertrade
D) e-commerce
Translation of foreign currency financial statements is best described as ________.
A) the process of restating foreign currency financial statements from one currency into
another
B) the process of combining financial statements of different subsidiaries into one
statement
C) the conversion of foreign currencies into the U.S. dollar
D) easier when the foreign currency is the euro
The most common approach to translate budgets and compare a budget with actual
performance uses the ________.
A) spot rate
B) forecast rate
C) historical exchange rate
D) temporal exchange rate
The free trade theories of specialization primarily assume that ________.
A) specialization leads to unemployment, but production gains compensate for job
losses
B) resources can move internationally from the production of one good to another
C) resources can move domestically from the production of one good to another
D) countries have objectives other than economic efficiency
Assume a firm has operations in Tokyo, where there is a collectivist culture. Which of
the following would most likely motivate the firm’s Japanese employees?
A) “employee-of-the-month” programs
B) extensive vacation time
C) on-the-job challenges
D) good health benefits
The shifting of national borders has most likely created which of the following
situations for international business?
A) It has left rural residents more isolated from technology.
B) It has complicated the understanding of behavioral factors affecting business.
C) It has increased physical barriers to exporting.
D) It has slowed communications between a company’s headquarters and foreign
operations.
Which of the following is the LEAST likely reason for inaccuracies in published
governmental data?
A) translation errors from the host country language
B) limitations of government resources and finances
C) purposeful publication of misleading information
D) false information provided to data collectors
Which of the following problems with the euro most likely worsened the financial crisis
in Greece?
A) excessive flexibility with interest rates
B) cultural disagreements on labor reform
C) lack of uniform fiscal regulation standards
D) unclear policies of the European Central Bank
The industry organization (IO) paradigm assumes which of the following?
A) stable political and cultural trends
B) shifting foreign-exchange rates
C) perfect competition
D) unequal value
Opal Computers is considering international production expansion. After scanning to
decide on a few countries to consider more closely, Opal managers will most likely
need to ________.
A) identify firms with which to form joint ventures
B) add some more countries for closer consideration
C) travel to the locations to analyze and collect specific data
D) make final decisions by expanding in locations near their rivals
Cultural differences in accounting include all of the following EXCEPT ________.
A) secrecy
B) transparency
C) optimism
D) language
An advocate of the legal-justification standard would most likely assert that the law
________.
A) develops slowly in response to evolving societal dilemmas
B) protects business activities that are unethical but not illegal
C) contains enforceable rules that apply to everyone
D) offers necessary moral flexibility for a society
The process of shifting production from a domestic to a foreign location is best known
as ________.
A) offshoring
B) outsourcing
C) licensing
D) joint venturing
Countries with varied climates and varied natural resources generally ________ than
countries with less varied climates and natural resources.
A) have lower per capita incomes
B) depend less heavily on trade
C) have more ethnic subgroups
D) have higher endowments of capital relative to labor
International marketing differs from domestic marketing in that ________.
A) marketing principles are different
B) consumers prefer domestically made merchandise
C) environmental variations require applying principles differently
D) low prices are a more important competitive factor in foreign markets
In foreign-exchange markets, reporting dealers are ________.
A) financial institutions that actively participate in local and global foreign-exchange
markets
B) located primarily in New York City since U.S. dollars are the most widely traded
currency
C) controlled by the Bank for International Settlements located in Switzerland
D) hedge funds and pension funds monitored by the World Bank
The issues that are the foundation of the Ethical Trading Initiative (ETI) include all of
the following EXCEPT ________.
A) employment is freely chosen
B) working conditions are safe and hygienic
C) child labor shall not be used
D) workers receive hourly wages that are consistent around the world
Quantum Footwear is an MNE that manufactures inexpensive shoes. Quantum
outsources portions of its production to independent companies located in Bangladesh
and India, where child labor is common. Other clothing and footwear firms have
recently faced criticism regarding the use of child labor, and Quantum executives want
to avoid similar problems. Which of the following guidelines enforced by Quantum
would LEAST likely be supported by the International Labor Organization?
A) establishing bridge schools
B) monitoring workplace safety
C) allowing children ages 10-15 to work a maximum of 4 hours per day
D) prohibiting abusive labor conditions
Monica, a Brazilian citizen, earned an MBA from Stanford University and has been
working at the New York branch of Goldman Sachs for one year. Monica is being
transferred to Goldman Sachs’ office in Brazil where she will best be characterized as
a(n) ________.
A) local
B) expatriate
C) reverse expatriate
D) third-country national
What difficulties of exporting can be minimized by customs brokers?
What has been the influence of Japan on supply chain management? In your answer,
discuss the concepts of industrial clustering and quality.
What is the difference between licensing and cross-licensing? What factors do firms
need to consider before entering into licensing agreements?
What are the differences between democratic and totalitarian political systems? What
does current research suggest about the spread of democracy and totalitarianism in the
world?
Why is economic freedom an important factor to consider when analyzing a country’s
economic development, performance, and potential?
What is an offshore financial center? What are the main characteristics of OFCs?
What are the advantages and disadvantages of using a nation as a point of reference for
a culture?
In a short essay, compare the strategies of diversification versus concentration and
provide examples of situations in which each would be used.
Many companies and industries argue that they should have the same access to foreign
markets as foreign industries and companies have to their markets. In a short essay,
discuss this issue of “comparable access,” or “fairness.”
Explain the rationale for and problems with making the infant-industry argument work
as intended.
What is foreign direct investment? What social factors in the external environment
might affect FDI?
What is the difference between a low-context culture and a high-context culture? How
do these differences affect communication in international business dealings?
What problems do managers commonly encounter when repatriated from foreign
assignments? How can HRM improve the repatriation process?
What is meant by the idea of economic freedom? What factors are used in the
Economic Freedom Index? For managers, what role does the Economic Freedom Index
play in analyzing the potential of a country?
In a short essay, identify and explain three competitive factors that influence
international businesses.
What are the major sources of internal funds for MNEs? Why do many MNEs acquire
external funds through the Eurodollar market?